U.S. gas: So cheap it hurts

Discussion in 'In the News' started by atlaw4u, May 1, 2008.

  1. atlaw4u

    atlaw4u Well-Known Member

    Relatively low taxes have kept pump prices far below most other developed nations, which some say is precisely why the current runup is so painful.

    [xfloat=left]http://www.cleanmpg.com/photos/data/523/Pain_at_the_Pump.jpg[/xfloat]Steve Hargreaves - CNN Money - May 1, 2008

    Despite daily headlines bemoaning record gas prices, the U.S. is actually one of the cheaper places to fill up in the world.

    Out of 155 countries surveyed, U.S. gas prices were the 45th cheapest, according to a recent study from AIRINC, a research firm that tracks cost of living data.

    The difference is staggering. As of late March, U.S. gas prices averaged $3.45 a gallon. That compares to over $8 a gallon across much of Europe, $12.03 in Aruba and $18.42 in Sierra Leone.

    The U.S. has always fought to keep gas prices low, and the current debate among presidential candidates on how to keep them that way has been fierce.

    But those cheap gas prices - which Americans have gotten used to - mean they feel price spikes like the ones we're experiencing now more acutely than citizens from other nations which have had historically more expensive fuel.

    Cheap gas prices have also lulled Americans into a cycle of buying bigger cars and bigger houses further away from their work - leaving them more exposed to rising prices, some experts say.

    Price comparisons are not all created equal. Comparing gas prices across nations is always difficult. For starters, the AIRINC numbers don't take into account different salaries in different countries, or the different exchange rates. The dollar has lost considerable ground to the euro recently. Because oil is priced in dollars, rising oil prices aren't as hard on people paying with currencies which are stronger than the dollar, as they can essentially buy more oil with their money as the dollar falls in value.

    And then there's the varying distances people drive, the public transportation options available, and the different services people get in exchange for high gas prices. For example, Europe's stronger social safety net, including cheaper health care and higher education, is paid for partly through gas taxes.

    Gas price: It's all about government policy. Gasoline costs roughly the same to make no matter where in the world it's produced, according to John Felmy, chief economist for the American Petroleum Institute. The difference in retail costs, he said, is that some governments subsidize gas while others tax it heavily.

    In many oil producing nations gas is absurdly cheap. In Venezuela it's 12 cents a gallon. In Saudi Arabia it's 45…[rm]http://money.cnn.com/2008/05/01/news/international/usgas_price/index.htm?cnn=yes[/rm]
  2. bomber991

    bomber991 Well-Known Member

    I wonder how much gas was in Europe 5 years ago? Probably $5? and now it went up to $8?

    That's definitely not as big of a hit as going from $1.50 to nearly $4.
  3. lyekka

    lyekka Well-Known Member

    I spent some time driving in Switzerland and Australia. Gas does seem cheap here after those trips.

    At least I was able to rent a small manual transmission vehicle so it was no problem.
  4. lamebums

    lamebums Member

    I'm not going to get in another fight over gas prices...so I'm just going to say they are too high across the board and leave it at that.
  5. KrazyDawg

    KrazyDawg Well-Known Member

    These "low" gas prices don't tell the entire story. Europe has more fuel efficient cars in the 50-70 MPG range while we mainly have 30 MPG. Gas ends up being cheaper or in some cases the same when you do the math. In addition, they also have universal health care and it's a reason why their taxes are higher but at least it benefits everyone. I'm paying 9,200+ and putting money in a FSA for health insurance at the group coverage rate through my company for a couple in their mid 20s with no kids.
  6. toastblows

    toastblows Well-Known Member

    I just got back from Europe a couple days ago. I rented a BMW 118d (diesel) which was rated 43/58mpg (in U.S. mpg). That made the $8.20/u.s. gallon diesel affordable (Regular gas was $8.79/u.s. gallon, around Munich Germany). I only acheived 36mpg, but i was doing 100mph and topped out at 126mph.....still better than all of the Big 3's cars currently sold in the U.S. that are driven at 65mph, sad :woot:
  7. toastblows

    toastblows Well-Known Member

    I looked at a paycheck breakdown of my wife's Aunt who is a nurse in Germany. She and her husband both pay 8.1% of their paycheck to the socialist health care system out of their income. Over all her net income is 70% of her gross....lots of taxes, but then some incentives from the government, such as 70 euros a month on her paycheck for having a 17 year old son at home.

    The general sales tax in Germany is 19%, and I think it was 7% for food when i looked at my grocery store receipts. Gasoline and Diesel is extremely high, and bike riding and walking, trains are super popular. The most unusual thing i saw was people riding 4wheelers on public roads...license plates and all.

Share This Page